We use cookies to personalise the website and offer you the greatest added value. They are, among other purposes, used to analyse visitor usage in order to improve the website for you. By using this website, you agree to their use. Further information can be found in our data privacy statement.



Key Tax Changes Under the One Big Beautiful Bill Act (OBBBA) – IN SHORT FORM

PrintMailRate-it
Foreign Informational Reporting.jpg

Rödl & Partner Tax Matters, Volume 2025-10​​​,​ published July 7, 2025​

​​​​​​​​​​​​​​
Signed into law on July 4, 2025, the OBBBA introduces sweeping tax reforms, including permanent extensions of several TCJA provisions and new measures aligned with President Trump’s 2024 campaign platform. Below is a summary of the most relevant changes for businesses and individuals.



🔹 Business Tax Highlights

  • 100% Bonus Depreciation Made Permanent: Full expensing of qualifying capital assets; transitional election for 40% or 60% expensing in 2025 if slower recovery preferred.
  • Manufacturing Real Estate Now Eligible: Bonus depreciation for facilities placed in service before 2031; excludes office/admin/sales areas.
  • Section 179 Expensing Increased: Limit raised to $2.5M; phase-out begins at $4M.
  • Business Interest Deduction: Returns to EBITDA-based limit; GILTI/Subpart F income excluded from ATI.
  • R&D Expensing Restored: Immediate expensing of domestic R&D; catch-up deductions in 2025 or, for small businesses, retroactive relief for 2022–2024.
  • Corporate Charitable Contributions: Limited to amounts exceeding 1% of taxable income.
  • Form 1099 Threshold Raised: Increased to $2,000 (indexed), effective 2025.
  • Advanced Manufacturing Credit Boosted: Increased to 35% for semiconductor investments after 2025.
  • Opportunity Zones Revived: New Qualified Opportunity Funds (2027–2033) with rural incentives.
  • New Markets Tax Credit: Permanently extended.
  • Paid Family & Medical Leave Credit: Extended and enhanced starting 2026.


🌍 International Tax Changes

  • Section 899 Removed: Proposed retaliatory tax dropped after G7 negotiations.
  • Foreign Tax Credit (FTC) Relief: Expense allocation rules eased for GILTI and Subpart F income.
  • GILTI & FDII Renamed and Reduced: GILTI becomes NCTI (40% deduction); FDII becomes FDDEI (33.34% deduction). Effective rates go from 13.125% to 14%.
  • BEAT Rate Fixed: Set permanently at 10.5%.
  • Downward Attribution Repealed: Section 958(b)(4) restored; introduces “foreign controlled foreign corporations.”
  • CFC Look-Through Rule: Made permanent.
  • Pro Rata Share Reform: Subpart F income allocated based on actual ownership period.


Energy Tax Changes

  • Clean Energy Credits Scaled Back: EV credit repealed; Section 45Y/48E credits phased out after 2027.
  • Credit Transfers Restricted: Transfers to foreign entities limited; some solar/wind credits eliminated.


👤 Individual Tax Changes

  • Tax Brackets Made Permanent: TCJA’s lower rates retained beyond 2025.
  • SALT Cap Raised: Increased to $40K ($20K separate filers), indexed through 2029.
  • QBI Deduction: 20% deduction made permanent; phase-in thresholds increased.
  • Excess Business Loss Limits: Permanently extended.
  • Standard Deduction: Made permanent and indexed. 2025: $31,500 (joint), $23,625 (HOH), $15,750 (single).
  • Senior Deduction: Temporary $6,000 deduction for taxpayers 65+, phased out at higher incomes.
  • AMT Relief: Higher exemption thresholds made permanent.
  • Child Tax Credit: $2,200 per child, with $1,400 refundable, indexed.​
  • Mortgage Insurance: Permanently deductible.​

  • Charitable Deduction for Non-Itemizers: Up to $1,000 starting in 2026.
  • Tips & Overtime Deduction: Up to $25K for tips, $12.5K for overtime (2025–2028).
  • Trump Accounts: New savings for children born 2025–2028; $1,000 government contribution.
  • 1% Excise Tax: On personal remittances abroad.
  • Car Loan Interest Deduction: Up to $10K deductible (2025–2028); phased out at higher incomes.


🏛️ Estate Tax

Exemption Increased: $15M per individual starting 2026; indexed for inflation.


If you have questions about how these changes may affect your business or personal tax planning, please contact your Rödl & Partner representative.

​​


This publication contains general information and is not intended to be comprehensive or to provide legal, tax or other professional advice or services. This publication is not a substitute for such professional advice or services, and it should not be acted on or relied upon or used as a basis for any decision or action that may affect you or your business. Consult your advisors. The fact that you have received this publication does not create an accountant-client or advisory relationship between you and Rödl Langford de Kock LLP or any of its subsidiaries or affiliates. If you wish to hire Rödl Langford de Kock LLP or any of its subsidiaries or affiliates you will need to speak with one of our accountants and enter into a written agreement establishing the scope of engagement. We have made reasonable efforts to ensure the accuracy of the information contained in this publication, however this cannot be guaranteed. Neither Rödl Langford de Kock LLP nor any of its subsidiaries nor any affiliate thereof or other related entity shall have any liability to any person or entity which relies on the information contained in this publication, including, but not limited to, incidental or consequential damages arising from errors or omissions. Any such reliance is solely at user’s risk. Any tax and/or accounting information contained herein is based on our understanding of the facts and assumptions we have been asked to make for the purpose of this publication alone, and on the tax laws and/or accounting principles in effect as of the date of this advice. No assurance is given that the conclusions would be the same if the facts or assumptions change, or are not as we understand them, or that the tax laws and/or accounting principles will not change subsequent to the issuance of these conclusions. In addition, we do not undertake any continuing obligation to advise on future changes in the tax laws and/or accounting principles, or of the impact on the conclusions herein. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Rödl Langford de Kock LP.

Copyright © February 2025 Rödl Langford de Kock LP
All rights reserved. ​




Contact

Contact Person Picture

Elisa Fay

CPA

Managing Partner Rödl National Tax

+1 404 525 2600

Send inquiry

Profile

Contact Person Picture

Steve Ratmeyer

CPA

Partner

+1 404 525 2600

Send inquiry

Profile

One Big Beautiful Bill Act

​​Click here to see the detailed version:  Key Tax Changes in the One Big Beautiful Bill Act (OBBBA)
Skip Ribbon Commands
Skip to main content
Deutschland Weltweit Search Menu